Model of Risk Management of Enterprises’ Profit Generation in the Agro-Industrial Complex

Abstract

AbstractThe factors and methods for risk assessment of generation of the firm's profit are studied. It is shown that losses from entrepreneurial risk are associated with the impact of operational, financial and tax risks on financial results of a firm. Approaches to the assessment of entrepreneurial risk associated with the loss of profits of an enterprise are determined. A logical-and-probabilistic risk model is proposed suggested that describes the impact of operational, financial and tax risks on profit loss. The procedure for calculation of probability indicators of various situations is determined in which the effects of operational, financial and tax risks are manifested. It was shown that the suggested logical-and-probabilistic model for entrepreneurial risk assessment can be applied to risk management of enterprises in the agro-industrial complex, since they are subject to the impact of objective natural and climatic factors that negatively affect financial performance. The method for the calculation of critical values of indicators that reflect the break-even points of the firm’s functioning, achievement of target profit indicators, calculation of parameters for risk values, classification of risk and identification of safety zones for the organization's profits is presented.KeywordsRiskProfitOperational riskFinancial riskTax riskSales profitProfit before taxProfit after taxFixed costsVariable costsRevenuePriceCapitalBorrowed capitalEvent probabilityRisk model